Mumbai, April 18: The Mumbai-based City Co-operative Bank Ltd was ordered by the Reserve Bank of India on Wednesday to halt all its banking operations, including the issuance of loans, advances, making investments or accept any fresh deposits.

The bank customers cannot withdraw any amount more than Rs 1,000, said the RBI order issued today. The bank has also been warned against disbursing any amount to the depositors without accruing permission from the RBI.

Although the central bank's order is bound to create panic among the City Co-Operative Bank customers, the RBI clarified that it's orders should not be considered as cancellation of the bank's license. The temporary measures have been imposed considering the bank's dwindling financial position.

Here is the full text of press release issued by the RBI:

The Reserve Bank of India (vide directive DCBS.CO.BSD-I/D-5/12.22.039/2017-18 dated April 17, 2018) has placed The City Co-operative Bank Ltd., Mumbai, Maharashtra, under Directions. According to the Directions, depositors will be allowed to withdraw a sum not exceeding ₹ 1000 (Rupees One Thousand only) of the total balance held in ery saving bank or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions. The City Co-operative Bank Ltd., without prior approval in writing from the Reserve Bank, will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose any of its properties or assets except as notified in the RBI directions dated April 17, 2018. The Directions have been issued from the close of business on April 17, 2018.

The issue of the directions by the Reserve bank should not, per se, be construed as cancellation of banking licence by the Reserve Bank. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these directions depending upon circumstances.

The directions are imposed in exercise of powers vested in the Reserve Bank under Sub-section (1) of Section 35 A of the Banking Regulation Act, 1949 read with Section 56 of the said Act. A copy of the directions is displayed at the bank’s premises for perusal by interested members of public.

(The above story first appeared on LatestLY on Apr 18, 2018 09:26 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).